Trump, EWC, private property rights – how SA got so out of step with the world

Ever since the ANC's attack on private property rights began 17 years ago, the IRR's Terence Corrigan has devoted much of his waking hours to understanding the motives and consequences of such Soviet-style ideology. In this interview with BizNews editor Alec Hogg, he examines US President Donald Trump's latest move, concluding that as a result, SA is in for a tough time – with little chance of reversing a reaction to an approach that's been decades in gestation..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..The seventh BizNews Conference, BNC#7, is to be held in Hermanus from March 11 to 13, 2025. The 2025 BizNews Conference is designed to provide an excellent opportunity for members of the BizNews community to interact directly with the keynote speakers, old (and new) friends from previous BNC events – and to interact with members of the BizNews team. Register for BNC#7 here..If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Highlights from the interview .South Africa has entered a new economic and political chapter with the official signing of the Expropriation Without Compensation (EWC) Act. The move has not only sparked concerns among investors and property owners but has also drawn international condemnation, most notably from former U.S. President Donald Trump, who has threatened to withdraw financial aid and trade privileges from the country..Terence Corrigan, a researcher at the Institute of Race Relations (IRR), has been monitoring the EWC debate for years and warns that this policy shift could have severe long-term consequences for South Africa's economy and democracy. Speaking with BizNews founder Alec Hogg, Corrigan dissected the implications of the law, the broader context in which it has been enacted, and how it aligns with South Africa's historical approach to property rights..More on Investment: https://irr.org.za/reports/the-irr-blueprint-for-growth-2024/the-irrs-blueprint-for-growth-opening-for-businessMore on America:https://www.dailymaverick.co.za/opinionista/2024-01-31-sas-case-at-the-icj-was-an-ideological-not-moral-cause/.https://www.news24.com/news24/opinions/columnists/guestcolumn/terence-corrigan-poor-investment-environment-undermines-sas-g20-voice-20241207.https://dailyfriend.co.za/2024/11/18/some-quasi-random-thoughts-from-a-south-african-perspective-on-an-american-election.https://www.businesslive.co.za/bd/opinion/2024-12-12-terence-corrigan-sa-must-avoid-appealing-to-morality-in-relations-with-us.https://dailyfriend.co.za/2021/10/01/on-south-africas-fixation-on-america/?fbclid=IwY2xjawINY_NleHRuA2FlbQIxMAABHVMoqbVCx5TXHObRaqvuQJOd5wgpbZRj2elDvYx79_1Tt457_ePt39s0Eg_aem_7rwv6jao9eypwdbH0ol1DQ.BizNews Reporter ___STEADY_PAYWALL___.The importance of property rights.Corrigan emphasizes that strong property rights are a foundational element of any successful economy. Citing examples from North Korea, Venezuela, the Soviet Union, and Zimbabwe, he warns that when a government weakens or abolishes private property rights, economic decline inevitably follows.."No society grows without property rights," he asserts, noting that these rights are deeply connected to personal freedom and democratic stability. Countries that respect property rights tend to have higher levels of individual freedom, while those that erode them often become authoritarian states where wealth and opportunity are concentrated in the hands of a few..The concern with EWC is not merely theoretical. Corrigan points out that history has shown how expropriation laws can be abused, particularly when state power is concentrated. While proponents of EWC argue that it is necessary to address historical land injustices, critics warn that it could lead to corruption, economic stagnation, and even social unrest..Read more: De Beer: Cyril & John lunch; Pieter & Corné in conflict; Cabinet "criminals"; the valour "stolen" by MKP & SANDF General – and Kagame's "war" talk….The economic risks.One of the most immediate risks of the new law is the chilling effect it could have on both domestic and foreign investment. South Africa has already been struggling to attract capital, with its investment levels as a proportion of GDP trailing behind other middle-income nations..The reaction from global markets has been swift. The rand has taken a hit, and fears of disinvestment loom large. The threat from Trump to revoke trade privileges under the African Growth and Opportunity Act (AGOA) could exacerbate the situation further. AGOA has provided South African companies with access to the lucrative U.S. market, supporting thousands of jobs. Its loss would be a significant economic blow..Beyond AGOA, the broader implications of South Africa's growing international isolation are becoming clear. The country recently joined the Hague Group, an alliance of nations calling for the end of Israeli occupation in Palestine. While this move aligns with the ANC's long-standing foreign policy stance, it has further alienated South Africa from Western allies, particularly the United States..The political fallout.Corrigan argues that EWC is not merely an economic issue but also a fundamental challenge to South Africa's constitutional democracy. The law shifts the balance of power between the individual and the state, potentially allowing political elites to decide who can own land and under what conditions..He raises concerns about the ANC's ideological commitment to state-driven economic control, noting that figures within the ruling party, such as Deputy Finance Minister David Masondo, have explicitly called for the abolition of private land ownership. The combination of EWC and a political culture that centralizes state control could lead to a scenario where economic decisions are made based on political loyalty rather than merit..One of the key arguments against the law is the potential for abuse. While President Cyril Ramaphosa and his administration insist that EWC will not be misused, Corrigan warns that future leaders—perhaps from more radical factions—could wield this legislation as a tool of political and economic control..Read more: BN Briefing: Trump vows to cut US aid to SA; De Beer on 21 SA ministers & deputy ministers under a cloud; and more.What can be done?.With South Africa facing potential economic retaliation from the U.S. and increasing investor scepticism, the question remains: what can be done to mitigate the damage?.Corrigan suggests that the best course of action would be a fundamental policy shift. The government could reassure investors by clarifying the scope of EWC, ensuring that compensation mechanisms remain in place, and emphasizing that private property rights will not be indiscriminately violated. However, he acknowledges that this is unlikely given the ANC's ideological commitment to the policy..On the diplomatic front, South Africa's strained relationship with the U.S. could be addressed through strategic engagement. Ramaphosa might attempt to reach out to Trump or other American policymakers to negotiate a compromise that safeguards trade relations. However, given Trump's unpredictable nature, such efforts may not yield immediate results..The road ahead.As South Africa moves forward under the new EWC framework, the country faces significant economic and political challenges. The consequences of this policy will likely unfold over the coming years, shaping South Africa's investment climate, international standing, and internal political stability..For now, the key question remains: can South Africa maintain its status as a constitutional democracy with a functioning market economy, or will it follow the path of other nations that have eroded property rights in the name of economic transformation, only to find themselves mired in poverty and authoritarian rule?.With international pressure mounting and investor confidence waning, the government's next moves will be crucial in determining South Africa's trajectory in the global economy..Read also.FT: Trump vows to stop US assistance to South Africa over land lawCorrigan on EWC: For a good law, get the facts right firstDavid Bacher – A Trump slump threatening SA assets' solid January gains

Trump, EWC, private property rights – how SA got so out of step with the world

Related Stories

Solly Moeng: Impeachment drama — Cyril fights, Mashatile waits, and SA is watching the DA…

Francois Rossouw - “Lying” Steenhuisen faces big damage claims from farmers

Shirley de Villiers: Joburg's last rites

Dr Zizamele Cebekhulu-Makhaza: Mkhwanazi "dragged South Africa out of the mud…"